State-Owned Enterprises as Bribe Payers: The Role of Institutional Environment

Noman Shaheer (), Jingtao Yi (), Sali Li () and Liang Chen ()
Additional contact information
Noman Shaheer: University of South Carolina
Jingtao Yi: Renmin University of China
Sali Li: University of South Carolina
Liang Chen: University of Sussex

Journal of Business Ethics, 2019, vol. 159, issue 1, No 14, 238 pages

Abstract: Abstract Our paper draws attention to a neglected channel of corruption—the bribe payments by state-owned enterprises (SOEs). This is an important phenomenon as bribe payments by SOEs fruitlessly waste national resources, compromising public welfare and national prosperity. Using a large dataset of 30,249 firms from 50 countries, we show that, in general, SOEs are less likely to pay bribes for achieving organizational objectives owing to their political connectivity. However, in deteriorated institutional environments, SOEs may be subjected to potential managerial rent-seeking behaviors, which disproportionately increase SOE bribe propensity relative to privately owned enterprises. Specifically, our findings highlight the importance of fostering democracy and rule of law, reducing prevalence of corruption and shortening power distance in reducing the incidence of SOE bribery.

Keywords: Agency theory; Bribery; Institutional theory; Managerial rent seeking; State-owned enterprises (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (13)

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DOI: 10.1007/s10551-017-3768-z

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